The Research Of Relevance Between Extraordinary Items And Value

Chinese securities market has developed for nearly30years, the rules and regulations have continued to be improved. But there are still a series of problems, especially some corporations in order to meet the listing requirements, they dressed and even false the financial report information. It made the huge losses to investors and the market. The financial report of listing corporation is an important source for the stakeholders. If the financial report can be disclosure fully and timely in an efficient market environment, it would provide a lot of useful information for the stakeholders’ decision. Therefore, how to improve the quality of accounting information to meet the stakeholders’ needs has become one of the most concerned problems in the research of modern accounting theory. Earnings management as a means to manipulate earnings of the management has become an important issue of people’s concern.Based on reviewing the relevant research, efficient market hypothesis theory, asymmetric information theory, opportunism behavior theory, combined with the Chinese situation, I selected329listed corporations in Shanghai and Shenzhen stock market, used the annual report data from2008to2013to analyze the value relevance of the extraordinary items. The result showed that disclosure the extraordinary items would not have the incremental information, it didn’t have the value relevance. No matter the extraordinary gains or losses, it would not influence the stock price. Therefore, disclosure the extraordinary items didn’t achieve the desired objective.